FW: RHB | Indonesia | Money Supply Stable, Economic Activities Will Likely Be Soft

Economic Research	08 October 2014
Indonesia
Economic Highlights
BI Held the Benchmark Rate Unchanged at 7.5% Bank Indonesia (BI) board of governors’ meeting decided to hold the BI rate unchanged at 7.5% on 7th October 2014. Similarly, the lending facility and the deposit facility rates were also kept unchanged at 7.5% and 5.75%, respectively. The move was expected and the BI had kept its key policy rate stable for the 11th consecutive month, as the current monetary policy stance has helped to contain price pressure and the current account deficit is improving, albeit gradually. Meanwhile, the BI expects the economic growth to come in at the low end of its 5.1–5.5% forecast for 2014, and it believes the moderation is inevitable following its move to tighten monetary policy in 2H 2013 to stabilise the economy. Nevertheless, the BI expects government consumption to be revived to enhance economic growth in the 2H, though private consumption and investment are predicted to soften during the period. Economist:  Luthfi Ridho  | +6221 2598 6888